Monday, 22 Oct 2018
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ECONOMY

Foreign banks restructure operations in Vietnam

Updated at Thursday, 27 Sep 2018, 08:19
The Hanoitimes - Foreign banks` restructuring process is aimed at refocusing resources on their remaining business activities and increase efficiency in Vietnam`s market.
Vietnam's financial market is witnessing major changes in operations of wholly-foreign owned banks, in which many decided to move away from their used-to-be-core business and focused on new direction, the Thoi bao Ngan hang (Banking Times) reported. 
 
Illustrative photo.
Illustrative photo.
Last July, ANZ Vietnam and Commonwealth Bank sold their respective retail banking businesses to Shinhan and Vietnam International Commercial Bank (VIB Bank).

The moves are considered part of those banks' restructuring process, aiming to refocus resources on their remaining business activities and increase efficiency in Vietnam's market.

Every step that a bank makes is calculated based on characteristics of each market, stated a bank's senior official, adding that foreign banks in Vietnam have their own strategies tailor-made for the country. 

Moreover, the revised Law on Credit Institutions has been supportive to those kind of transactions, so that foreign banks can complete the restructuring process in a timely manner. 

In case of ANZ Vietnam, the sale of its retail banking brought a huge sum in return, which in turn helped the bank concentrate its resources on priorities such as corporate clients and credit institutions. 

By the end of the second quarter of 2018, ANZ Vietnam's total assets increased by 16% compared to the beginning of the year, mainly thanks to deposits at banks (up VND320 billion or US$13.69 million) and lending to other credit institutions (up VND4.15 trillion or US$177.54 million). 

Meanwhile, other foreign banks such as Hong Leong Bank, Shinhan Bank, Woori Bank, CIMB Bank, UOB, Public Bank Berhand, among others, are pushing forward with strategy for retail banking in Vietnam. 

Many of those in subject have been diversifying their products, and approaching customers through phone call or message, which shows fierce competition in this market segment among domestic and foreign banks.

Shin Dong Min, CEO of Shinhan Bank Vietnam, said the bank's target is to enter the top three credit card providers in Vietnam over the next three years. 

In early 2018, Shinhan Card, a subsidiary of Korea's Shinhan Financial Group has reached an agreement to acquire Prudential Vietnam Finance Company for US$150.8 million.

Similarly, Woori Bank also aimed to become one of the top foreign banks in Vietnam's market. The bank has recently announced an increase in charter capital from VND3 trillion (US$12.66 million) to VND4.6 trillion (US$195.4 million), becoming the second largest wholly foreign-owned bank in Vietnam just behind HSBC by capital.

Additionally, UOB plans to acquire a major shares of local credit institution to enhance its competitiveness. The move is in line with its parent bank' strategy, which focuses on Asia, especially Vietnam's market. 
Hai Yen
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